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7 February 2014

Twenty years ago, in February 1994, I published a lengthy cover story in The Atlantic Monthly, "The Coming Anarchy: How Scarcity, Crime, Overpopulation, Tribalism, and Disease are Rapidly Destroying the Social Fabric of Our Planet." I argued that the combination of resource depletion (like water), demographic youth bulges and the proliferation of shanty towns throughout the developing world would enflame ethnic and sectarian divides, creating the conditions for domestic political breakdown and the transformation of war into increasingly irregular forms -- making it often indistinguishable from terrorism. I wrote about the erosion of national borders and the rise of the environment as the principal security issues of the 21st century. I accurately predicted the collapse of certain African states in the late 1990s and the rise of political Islam in Turkey and other places. Islam, I wrote, was a religion ideally suited for the badly urbanized poor who were willing to fight. I also got things wrong, such as the probable intensification of racial divisions in the United States; in fact, such divisions have been impressively ameliorated.However, what is not in dispute is that significant portions of the earth, rather than follow the dictates of Progress and Rationalism, are simply harder and harder to govern, even as there is insufficient evidence of an emerging and widespread civil society. Civil society in significant swaths of the earth is still the province of a relatively elite few in capital cities -- the very people Western journalists feel most comfortable befriending and interviewing, so that the size and influence of such a class is exaggerated by the media.The anarchy unleashed in the Arab world, in particular, has other roots, though -- roots not adequately dealt with in my original article:The End of Imperialism. That's right. Imperialism provided much of Africa, Asia and Latin America with security and administrative order. The Europeans divided the planet into a gridwork of entities -- both artificial and not -- and governed. It may not have been fair, and it may not have been altogether civil, but it provided order. Imperialism, the mainstay of stability for human populations for thousands of years, is now gone.The End of Post-Colonial Strongmen. Colonialism did not end completely with the departure of European colonialists. It continued for decades in the guise of strong dictators, who had inherited state systems from the colonialists. Because these strongmen often saw themselves as anti-Western freedom fighters, they believed that they now had the moral justification to govern as they pleased. The Europeans had not been democratic in the Middle East, and neither was this new class of rulers. Hafez al Assad, Saddam Hussein, Ali Abdullah Saleh, Moammar Gadhafi and the Nasserite pharaohs in Egypt right up through Hosni Mubarak all belonged to this category, which, like that of the imperialists, has been quickly retreating from the scene (despite a comeback in Egypt).

India’s economy is performing poorly, at least compared to its relative dynamism just a few years ago. With a general election to be concluded by the end of May 2014, many are looking to the country’s next government to break India out of its economic doldrums—but that hope may be misplaced. Political scientist Milan Vaishnav spoke with Ila Patnaik, a leading Indian macroeconomist, about the deep roots of India’s current economic crisis and the type of reforms a new government will need to institute to fix these issues.

Vaishnav: India’s economic growth rate recently slumped to a ten-year low. Inflation remains stubbornly high, and twin fiscal and current account deficits are cause for concern. Will India’s economic prospects improve if a new government comes to power in the upcoming general election?

Patnaik: Many observers are optimistic. Several recent reports suggest that India will regain its economic footing once elections are held and a new government is formed.

These reports all emphasize the effect that creating a stable government will have on India’s economy. Of course, the performance of the economy will also depend on the policies and preferences of that new government. For instance, investors are hopeful that a government headed by Narendra Modi, chief minister of Gujarat and the prime ministerial candidate from the opposition Bharatiya Janata Party (BJP), would be more likely to promote economic reforms than the incumbent United Progressive Alliance because Modi is considered more pro-business than the ruling Congress Party.

By contrast, investors are less optimistic about what a new government headed by one of India’s myriad regional parties or the untested anticorruption Aam Aadmi Party would mean for the economy. The country has little experience with such governments at the center, so their economic policies are largely unknown. Furthermore, investors view such “third front” governments as inherently less stable.

Changes in leadership aside, there are significant problems with the Indian economy at the heart of the current slowdown. So I fail to see how India’s economic problems will suddenly disappear, regardless of the election results. To truly make change, future governments would need to resolve some of the country’s deep-seated issues and build state capacity. How they propose to do that, however, is unclear.

Vaishnav: What are these deep-seated problems with the system?

India grew very quickly in the last decade, and institutional change and state capacity have yet to catch up with the country’s now much-higher GDP. Had the economy grown at a slower rate, India could have gradually scaled up its state capacity and reformed its institutional foundations.

India lacks a transparent, systematic, and nondiscretionary policy framework that allows the government to function effectively in many spheres, which means that many government decisions are made on the basis of individual discretion. For example, the state currently issues licenses and permits to firms for their operation on a case-by-case basis, a practice that results in the government choosing—often in an arbitrary and opaque manner—which firms receive clearances and which ones do not. As a result, favoritism and bribery can heavily influence which companies are granted permits. This model worked when India’s economy was smaller and growing slowly, but it no longer functions in the current era of economic dynamism with the number of firms and decisions increasing rapidly.

February 6, 2014: Since its founding India has had to import most of its weapons. Efforts to change this have failed so far, mainly because of corruption and unwillingness to tolerate competitive and efficient defense industries. The corruption that has been pervasive in India for thousands of years and makes imported weapons more lucrative to bribe-friendly government officials involved than locally made stuff.

One bit of good news is that this form of corruption is under heavy attack. Not just because fighting corruption has become enormously popular with voters, but because with more Western countries supplying weapons to India you have suppliers who are often very anti-corruption themselves. When Russia was supplying over 80 percent of weapons imports you had a supplier who was quite comfortable with bribes and payoffs. But for most of the last decade Russia has been losing sales to Western firms. The culture of corruption still exists in Indian defense procurement, but it is under heavy attack. But even if no bribes were involved when buying foreign weapons, that would not fix the inability to create a competitive Indian weapons industry.

The reason for that has to do with why, for most of the last half century, some 80 percent of Indian weapons imports have come from Russia. There were several reasons for that; politics, price and practicality. The politics was a decision by Indian politicians to be “non-aligned” during the Cold War. This conflict began just as India became independent from the British Empire. Still resentful towards Britain and the West for two centuries of colonial domination, India officially did not take sides during the Cold War. Yet its relations with Russia (a dictatorship) were much warmer than with the Western democracies. Although India clung to democracy, the educated classes were infatuated with the promise of socialism. For several decades Indians abhorred the Russian form of government (a dictatorship) but admired their socialist approach to running their economy. It wasn’t until the 1980s that most Indian politicians admitted that the Russian economic model was not working and set in motion the sort of free enterprise policies that China employed. By then it was too late. Decades of attempts to impose government regulation and guidance of the economy had created a huge bureaucracy that could not be easily dismantled. That’s because many of these jobs were used by politicians to reward supporters.

Then there was the price of Russian weapons. They were cheaper than Western stuff. This meant more could be spent on bribes and payoffs. Finally, there was practicality. India’s main foes were Pakistan and China. Pakistan had a much smaller population, economy and defense budget than India. Russian weapons were adequate for Pakistan. China was also poorly equipped (until quite recently) and separated from India by the Himalaya Mountains. So the Russian weapons were just fine for Indian needs.

Since the Cold War ended in 1991 all this has changed. Indian politics has changed and now officially wants to clamp down on the corruption (which everyone admits cripples the economy). Price is still important, but it’s been noticed that the Russian weapons have slipped in quality and effectiveness since the Soviet Union collapsed. Pakistan is even less of a military threat, because Pakistan is even more corrupt and economically crippled than India. China, however, is another matter. China has managed to build a powerful and productive arms industry. So all those Russian weapons India has no longer provide any degree of superiority. India needs Western arms to maintain a competitive military for confronting China. But Western weapons are more expensive. It’s possible to make them in India under license, but Indian industry has not been able to master high tech sufficiently to make this practical. In short, it’s no longer practical to tolerate an inefficient domestic defense industry.

A trick question: What was the most decisive weapon of the Second World War? If your answer, as expected, is the atom bomb, you are wrong. It was the B-29 Superfortress bomber that delivered it. Without the plane, the A-Bomb would have been only a novelty. The flip side of this question is: What was the most egregious policy failure of Imperial Japan (besides the surprise raid on Pearl Harbour)? It was the delay in developing its Nakajima G10N Fugaku strategic bomber with the range to hit American island bases in the western Pacific and the US west coast early enough in the war to make some difference. Often, the means of delivery are as important as what’s delivered.

These historical thoughts were prompted by the statement of the new Chief of the Air Staff, Air Chief Marshal Arup Saha, who talked of his service achieving a “strategic” profile in terms of its ability to pull “expeditionary” missions. While the growing numbers in the inventory of C-17 and C-130J transport planes, and of aerial tankers able to extend the range of combat aircraft, make expeditionary actions easier to mount, such tasks in the past (Operation Cactus in the Maldives, Operation Pawan in Sri Lanka) were adequately managed with the old An-32s. The Saha statement revealed an eagerness to sidestep the traditional criterion — a fleet of bombers capable of long range attack — that distinguishes a strategic air force from a theatre-oriented one, such as the IAF.

How and why did the IAF, despite a palpable need, not become strategic? The fault lies in the natural shrivelling of missions beginning in the 1950s that accompanied the dimming of the strategic vision and the narrowing of the military focus, laughably, to Pakistan as main threat, and the quality of leaders helming the air force. The 1947 era of service brass, mostly Group Captain-Air Commodore rank officers fast-forwarded to the top, having loyally served the Raj and imbibed British ways of thinking, configured the service in the manner their old bosses had planned. It resulted in the IAF emerging as a creditable tactical force.

Short-legged fighter aircraft with a leavening of fighter-bombers became its calling card with the UK-built Lysanders, Tempests, and Spitfires of the 1940s replaced by the French Dassault Ouragans and Mystere-IVs, and the Hawker-Siddeley Hunters which, in turn, were succeeded by the Russian Mig-21s, MiG-23s, MiG-27s, MiG-29s, and the Su-30MKIs. The odd Western import during this latter phase — the Jaguar and Mirage 2000, were also only short to medium range aircraft. The only dedicated bomber the IAF ever acquired was the medium-range Canberra in the Sixties. But highlighting its limited operational mindset was the air force’s choice of the Folland Gnat, a local area air defence aircraft, for licence-production in the country.

Memory has whims of its own, and is all the while choosy. Or perhaps it has its own rationale which it refuses to disclose. Thus it happens that on a somewhat chilly and windy January morning in Calcutta, memory hectors me back 50-odd years across the span of continents and oceans.

January 1961 and it was Inaugural Day in Washington, DC. John Fitzgerald Kennedy was to be sworn in as the new president of the United States of America. He had won back the presidency on behalf of the Democratic Party after a lapse of eight years in one of the closest, bitterest contests, defeating Richard Nixon; then vice-president and the Republican candidate.

American politics had been passing through an intensely interesting phase during the preceding few decades. The long post-First World War reign of the Republican Party came to an end because of its gross failure to tide over the crisis of the Great Depression. Franklin Delano Roosevelt, who had an impeccable plutocratic background, was nonetheless elected the Democratic president in the 1932 polls. He was imaginative enough to launch the New Deal; the stream of publicly-sponsored projects he initiated succeeded in creating new jobs and the economy began to turn the corner. That was applied Keynesianism even before Keynes’s General Theory had been published. Roosevelt was thunderingly re-elected in 1936, again in 1940, and, with the Second World War on, once more for an unprecedented fourth term in 1944. But by then he was physically a wreck and was soon dead. The vice-president, a former haberdasher from Kansas, Missouri, formally filled in as president. He took everyone by surprise; he was full of guts and was quick to take decisions. It was at his decision that the bomb devastated Japan; hastened its surrender and drew the final curtain on the Second World War. Truman’s truculence was again the central factor which terminated the wartime alliance with the Soviet Union and the tacit understanding with it over respectful territorial jurisdiction in Europe in the post-Nazi era; in a sense, therefore, he was, along with Winston Churchill, the co-author of the concept of Cold War.

It had been a long wait. The Republican Party was itching to get back to the White House. Harry Truman frustrated them even in 1948 and got elected almost on his own by plunging into a fighting campaign, making all predictions look foolish. In desperation, the Republicans turned to the vastly popular Dwight Eisenhower, the victorious Second World War army general, and implored him to be their candidate in the presidential elections in 1952. He agreed. His ability to charm the people was unbelievable. The Democrats had put up a former governor of Illinois, the slightly scholarly Adlai Stevenson, as their candidate. He was no match for ‘Ike’; the Republicans re-captured the White House after 20 years.

Notwithstanding many inherent bottlenecks, the cross Line of Control (LoC) trade between two parts of erstwhile state of Jammu and Kashmir had emerged as a significant achievement of the peace process that started with a ceasefire along the LoC in 2003. Besides the ambitious resumption of travel on once famous Jhelum Valley road between Srinagar and Muzaffarabad and subsequently in Jammu’s Poonch-Rawlakot sector, the LoC trade kick-started in October 2008 soon after the Amarnath agitation hit the two regions of Kashmir and Jammu in a bitterly fought “communal” fight over the land allotted to Amarnath Shrine Board by the state government.

On the face of it, the land row has nothing to do with the trade between two sides. But the trade was already on the wish list of both India and Pakistan as a cementing measure to bring the two sides closer as part of confidence building. However, when the traders in Jammu put an “economic blockade” in place to “avenge” the opposition of Kashmiris to allotment of land, the clamour for opening the traditional Muzaffarabad route grew louder.

Delhi and Islamabad quickly moved to make it a reality, not only to douse the fires of land row but also to complete the process of CBMs. But it came at a huge cost. By that time 60 people had died in firing by police including senior separatist leader Sheikh Abdul Aziz who led the Muzaffarabad Chalo march on August 11, 2008. The march had been supported by all separatists across the board and even hard-liners such as Syed Ali Geelani had thrown his weight behind it.

Despite many ups and downs, the trade moved on. Lack of proper infrastructure and facilities such as banking proved to be a stumbling block in its progress, but the trade survived. Even amid heightened hostilities between the two countries, the traders who had developed huge stakes in this trade tried to push it in this hostile environment. But the biggest blow that came to the trade was in the third week of January when a truck coming from Muzaffarabad was found to be carrying Brown Sugar worth whopping Rs 114 crores in the Indian market. The driver of the truck was arrested and it led to detention of drivers of many trucks on both sides. The Srinagar-Muzaffarbad bus service was also suspended leaving many people stranded on either side of LoC. Even though the bus service resumed on Monday, the trade standoff prevails.

This was not for the first time that any contraband item was found in a truck. But in the past the quantity was ignorable. This time, the cost of this 114-kilogram consignment in the International market is put at Rs 560 crores and police sources say that it was Sri Lanka bound consignment. The result is that the trade has suffered not only huge losses but a threat about its closure is also looming large since both sides are sticking to their ground.

The cross-LoC trade between two parts of J&K has been stopped once again. This time the reason is the arrest of a driver from the other side, who was found by the Indian authorities bringing Brown Sugar. Smuggling across the international border between India and Pakistan and across the LoC between two parts of J&K is nothing new; the amount of drugs and drug addicts in Punjab and J&K would reveal the quantum of illegal drug trade in this part of the world. However, in this case, it was found being carried by the driver who was to bring goods from the other side of J&K to this side.

Trade across the LoC remains suspended, as both India and Pakistan have failed to reach an agreement; while Pakistan wants the release of the driver, India would like to pursue legal action against the driver for smuggling drugs. As a result, the cross-LoC trade has not resumed.

Perhaps, in the next round of talks over the issue, both countries may be able to find a way out. Perhaps it may take some more time If cross-LoC trade has to be meaningful and really achieve its potential, then certain serious questions needs to be addressed. Else, even if the cross-LoC trade resumes, it would be slow and dull, without achieving what it could – politically and economically, and wait for another incident to trigger a closure.

The most important question is: are India and Pakistan serious about the cross-LoC trade? This in fact is the primary question and mother of all troubles for the cross-LoC trade. An unbiased answer would be a simple no. Neither India nor Pakistan is keen on strengthening and expanding the cross-LoC trade.

For both the countries – it is more of a charade. If one has to be more sympathetic to both countries, perhaps the argument could be – both India and Pakistan started this initiative and got embroiled in multiple other issues – domestically and bilaterally. Neither the bus service nor the truck service between the two parts is a priority for them.

It is unfortunate, that neither Manmohan Singh nor his Pakistani counter parts in the last few years took the cross-LoC initiatives seriously. If only New Delhi and Islamabad wanted to make these initiatives serious and meaningful, by now they would have expanded substantially. From building institutions of trade to facilitating communication and travel, so much could have been achieved in the last few years. Also in this expansion, there would have been a relook into goods and items of trade that would have made the initiative meaningful.

Given the lack of political interest in such an important initiative in the national capitals in India and Pakistan, and given the sensitive nature of J&K and its history, it is anything but natural that the intelligence and security agencies view these initiatives more as a security problem, than as a social and political initiative. At the slightest provocation, they are meant to do, what they are supposed to.

In terms of size, the Indian armed forces are amongst the largest in the world but in terms of equipment, they are lamentably lagging behind the leading edge of weapon systems and aircraft technology. In the area of military helicopters as well, India is forced to import most of the requirements from foreign vendors while the regulatory framework panders to HAL monopoly. Should the indigenous helicopter design and production capability be untethered from HAL and opened to private enterprise, there would be two advantages. Firstly, the delays and inefficiencies would disappear and secondly, the cost of leading edge technologies and products would reduce not just because of indigenous production, but also because of the possibility of export and economy of scale.

The Chinook scored over the Mi26 due to its lower acquisition/ life-cycle costs and poor serviceability record of the Mi26…

According to a report entitled “Global Helicopters Market Assessment” prepared recently by business consulting firm Frost & Sullivan, more than 11,170 military platforms are expected to enter service worldwide up to the year 2022, with a peak in 2018 for most regions. However, as per the report, the Asia-Pacific and Central Asia regions are likely to prove exceptions and would continue to order “significant” amounts of new helicopters as the technological and demand hub, especially for the military helicopters segment, progressively shifts from the West to the East.

Given that prognostication and considering the existence of two inimical territorial neighbours eagerly waiting for opportunities to afflict an ignominious military trouncing upon India, it is tragic that the nation should still be dithering over important defence procurement decisions. This is all the more lamentable as indigenous defence production is abysmal despite India being the largest arms importer in the world. The MMRCA saga has taken on the tenor and texture of an Indian TV serial wherein the story line changes in a bizarre manner just as one senses that the narrative is coming to an end. In a similar vein, the Reconnaissance and Surveillance Helicopter (RSH) selection process has been inordinately delayed for one reason or another while the military awaits the much needed rotary wing elements to meet urgent and minimal needs commensurate with its size, roles and adversaries.

In an attempt to build a high-tech, self reliant and service oriented defence industry, India developed a considerable and large complex of Defence Public Sector Units (DPSUs), Ordnance Factories (OFs) and the Defence Research and Development Organisation (DRDO). In addition, the Ministry of Defence (MoD) formulated policies like the Defence Procurement Procedure, Defence Production Policy and Offsets Policy, and established systems and structures to indigenise defence production. However, decades of efforts by the government and the public sector units has not resulted in the expected optimum levels of indigenisation. India's defence industry is plagued with a number of structural, technological and institutional limitations that impede the growth of the armament industry. The year 2001 ushered in numerous reforms, the highlight being the opening of doors to the private industry. However, nearly thirteen years later the results are dismal and have had a negative impact on our national security preparedness.

The private industry has abundant enthusiasm and is optimistic about its ability to play a greater role in in-house defence production and exports. Time and again, the MoD and security experts have voiced their opinion about encouraging the private sector in the defence arena and providing it with a level playing field with respect to their public sector counterparts. However, the private sector is uncertain and unwilling of investing in a highly risky Research & Development (R&D) and infrastructure environment in exchange for low returns. An uncertain regional neighbourhood, the epicentre of terrorism next door and the growing nexus between Pakistan and China combined with the economic imperatives of a vibrant and robust domestic defence industry obligate the decision makers to accord the highest priority to indigenisation. The need to enhance trade, increase investment, and accelerate GDP growth coupled with a flourishing manufacturing sector is required to revive the flagging Indian economy. The hallmark of emerging economies has been R&D, manufacturing and exports acting as the fundamental drivers of rapid growth. India has been slow off the blocks, but through the application of best standards and stringent enforcement of policy guidelines, it possesses the capability to improve its languishing defence export figures and plug critical operational modernisation gaps in the armed forces.

A possible pragmatic suggestion to actively involve the private sector is the privatisation of INSAS rifles' production and the subsequent export of a modified version to foreign countries. INSAS (INdian Small Arms System) rifles were developed by the OFB and Armaments Research and Development Establishment (ARDE), Pune in the 1980s and were inducted in the Indian Army in 1994-95. The indigenous 5.56mm design borrowed features from Kalashnikov pattern rifle, SLR and other rifles.[i] The indigenously developed rifles were used extensively in the 1999 Kargil conflict but they suffered from several glitches – rifles' bulging barrels, frequent breakdown of metal parts and cracks in its composite material and plastic magazines when employed in extreme weather of Kashmir and Rajasthan. The rifles encountered reliability problems in the cold climate as they would jam occasionally and the polymer magazines would crack. There were also cases where the rifle would fire on full-automatic while in three-round burst fire mode. Consequently, the Army planned to replace the INSAS rifles with new generation assault rifles for conventional warfare and counter insurgency operations. As part of the Army's F-INSAS programme, acquisition of rifles from foreign vendors along with transfer of technology is underway. The five shortlisted contenders are Beretta ARX-160, the CZ-805 BREN, the Galil ACE, the Sig 551, and the Colt Combat Rifle, a variant of the M16A1.

Nearly sixty-seven years of Independence and not a single combat aircraft has been produced by India! Despite the word ‘indigenisation’ featuring repeatedly in political rhetoric, one of the reasons is because of the vested interests within the government of the huge kickbacks associated with imports of military hardware. The perception that in every armament deal massive amounts of taxpayers’ money is siphoned off is largely correct. Blacklisting vendors is merely theatrics to divert public attention from this crass truth. The long, convoluted and tedious process of procurement of military hardware has been created deliberately by the politico-bureaucratic red-tape to extract larger kickbacks which eventually is the taxpayers’ liability!

Worse, it appears that the primary national objective is not to add military capabilities to ensure the nation’s security but to find ways to guarantee maximum kickbacks.

Worse, it appears that the primary national objective is not to add military capabilities to ensure the nation’s security but to find ways to guarantee maximum kickbacks. Frankly, nobody involved in the decision-making process is really concerned about the MMRCA being inducted on time to shore up the rapidly declining firepower of the Indian Air Force; or about the Indian Navy receiving submarines in time; or with the tremendous collateral damage the nation suffers on its borders with Pakistan because the infantry is ill-equipped. Despite similar levels of corruption, China never overlooks the primary objective of building military muscle. Frankly, no other country does except India!

It is amazing that the Indian genius that has successfully launched technologically advanced and sophisticated spacecraft to Mars or has finally mastered ‘cryogenic’ engine technology is unable to produce small arms such as a modern rifle, carbine or a pistol.

India’s increasing dependence on import of arms up to almost 80 per cent is attributable to multiple reasons. Instead of creating competition between the Defence Public Sector Units (DPSUs) and the private sector, the Ministry of Defence (MoD) and the entrenched vested political interests continue to ignore colossal wastage of resources in the public sector. Elements in the government appear to have huge personal stakes in resources being funneled from the meagre defence budget under the guise of secrecy. The case of the Tatra trucks being re-invoiced at higher price by the Indian public sector unit clearly revealed the modus operandi of siphoning public funds.

The truth, however, is that substantial foreign assistance by way of technology was obtained in developing spacecraft, cryogenic engine, Light Combat Aircraft, the Arjun tank or missile systems. While one may take pride in naming the indigenous tank as ‘Arjun’, the fact is that the tank boasts of foreign components up to 55 per cent. In all fairness, even critics will agree there is nothing to be ashamed of in using imported technology till the capability for indigenous design is developed in-house. All modern hospitals in India today rely largely on imported equipment but at the same time, they earn millions in foreign exchange through medical tourism.

SOME UNKNOWNS: Given the lack of documentational support and evidence, along with interviews with the top leadership on both sides, most of the understanding of the two Taliban has to be based on conjecture. Picture shows a Pakistan Taliban militant in the Waziristan area.

The Pakistan Taliban was more a creation of the al-Qaeda than that of the Afghan Taliban under Mullah Omar

What are the linkages between the two Taliban in Pakistan and Afghanistan across the Durand Line? Is there a hierarchy or chain of command between these two, or are both two different organisations with different objectives, ideologies and targets? Is there a communication link between the two leaderships in terms of operational activities, or are they more of a rhetoric?

The more one analyses the linkages between the Afghan Taliban and the Tehrik-e-Taliban Pakistan (TTP), the more differences one could trace between the two organisations — in terms of history, objectives, ideology and operational targets.

Given the lack of documentational support and evidence, along with interviews with the top leadership on both sides, most of the understanding will have to be conjectures based on an informed guess. A larger debate is needed on this subject.

The 10-year gap

There are adequate writings and historical accounts of the Afghan Taliban; from Ahmed Rashid’s magnum opus on the Taliban, to multiple publications during the last decade, there is a clear historical account of how Mullah Omar from a madrasa in the Federally Administered Tribal Areas (FATA) ended up becoming the Amir of Afghanistan.

The Afghan Taliban was founded and supported by Pakistan in the 1990s to achieve a particular objective in Kabul. To use Admiral Mike Mullen’s proposition much later, the Afghan Taliban in the 1990s was a veritable arm of Pakistan — both the political leadership and the military establishment. There is adequate literature available today explaining why Pakistan founded and supported the Afghan Taliban in the 1990s. Of course it was not referred to as the “Afghan” Taliban then; it was just the Taliban. The founders of the Taliban would have never expected or even dreamt that there would be a parallel organisation east of the Durand Line within Pakistan.

2013 has been a promising year for Boeing’s defense business in India. Through the year, Boeing Defense, Space & Security (BDS) remained focused on partnering with the Indian armed forces on their achieve their modernization and mission-readiness objectives by delivering five C-17 aircraft to the Indian Air Force and three P-8I aircraft to the Indian Navy.

Boeing is also looking at ways to partner with small- and medium-sized enterprises throughout India.

Boeing ramped up its support and training capabilities to help customers achieve maximum operational and mission- readiness of their products. Boeing is supporting the IAF’s C-17 Globemaster III fleet through the Globemaster III Integrated Sustainment Program (GISP) Performance-Based Logistics contract. The GISP “virtual fleet” arrangement ensures mission readiness by providing all C-17 customers access to an extensive support network for worldwide parts availability and economies of scale.

Training for Indian Navy crews that will operate and maintain P-8I aircraft continues. The crews completed their training on schedule in Seattle last year. Between February and September last year, Boeing trained more than 110 Indian Navy professionals, including five pilot crews, five mission crews and a number of flight signalers/observers. Pilots, mission systems operators and maintainers received a combination of flight, classroom and lab training.

Boeing at Defexpo 2014

At the eighth Defexpo 2014, Boeing’s broad line-up of defense products and services that are uniquely designed to meet India’s security requirements will be on display. Our commitment to growing the Indian defence and aerospace sector and partnering with customers on their modernization effort will be a dominant theme underlying our presence at the show.

Boeing’s exhibit features large-scale models, interactive displays, a P-8I mobile console, and Virtual Mission Board. The models include mobility and surveillance platforms such as the P-8I maritime surveillance and anti-submarine warfare aircraft and the C-17 strategic airlifter; attack and multi-mission heavy-lift transport helicopters such as the AH-64 Apache, CH-47 Chinook and V-22 Osprey; and unmanned systems. Products from Boeing subsidiaries Tapestry Solutions and Miro Technologies are on display in the Boeing booth and available for demos:

Boeing’s services and support capabilities will be demonstrated during the show through presentations and discussions on lifecycle support tools, training, program based logistics, planning and forecast, and spares management. Opportunities in services and support are significant growth areas for India which will help our customers achieve maximum operational readiness of the products we are selling now and into the future.

As the withdrawal of U.S. and NATO forces from Afghanistan approaches, anxieties about the future of the country have increased...

As the withdrawal of U.S. and NATO forces from Afghanistan approaches, anxieties about the future of the country have increased. A palpable sense of pessimism has come to characterize thinking about the Afghan situation in the West, as well as in Afghanistan and among its neighbors. What will happen in Afghanistan and the region when the transition is completed? How will the domestic situation evolve? How will the regional position themselves? What will the impact of the resulting outcome on Western security and solidarity be? These questions and others loom large in considering the future of Afghanistan and its potential impact on regional and international dynamics.

There are no simple answers to these questions; mapping the future of Afghanistan is indeed a complex task. The number of Afghan and non-Afghan actors, their competing interests and fluctuating alliances, and the lack of a cohesive vision for the country's political future makes it difficult, if not impossible, to predict clear scenarios beyond a certain level of generality.

This paper analyzes the evolution of four main variables or categories of variables: 1) the readiness of the Afghan National Security Forces (ANSF) to assume responsibility for Afghanistan's security post-2014; 2) the policies of regional actors, especially Pakistan; 3) the role of the United States; a 4) Afghanistan's political system. The paper argues that the latter will ultimately be the decisive factor, as it will condition the sustainability of existing Afghan institutions, including the ANSF, or constrain the external factors. The paper concludes that the future of Afghanistan will likely fall between a "muddle through" scenario where a partly dysfunctional Afghan state will struggle to survive, and a situation of chaos in which all significant state authority will have disappeared and where Afghanistan as a nation is only a loose confederation of fiefdoms. It then examines the potential impact of these variables in the post-2014 era and concludes that Afghanistan is likely to remain a significant security concern for years.

In his first trip abroad since replacing General Ashfaq Parvez Kayani in November 2013, General Raheel Sharif, Pakistan’s Chief of Army Staff, left on a three-day visit to Saudi Arabia. Sharif will meeting King Abdullah and the entire gamut of top Saudi military officials.

According to DAWN, Sharif will focus on defense and security cooperation and address a range of issues, pushing for a “new era in the strategic partnership” between Saudi Arabia and Pakistan.

The visit will serve as a sort of meet-and-great for Sharif who has now been Chief of Army Staff for a little over two full months. Saudi Arabia’s defense and security ties with Pakistan hinge on a close relationship with the powerful Pakistani chief of army staff. Sharif may also discuss more mundane issues in the Kingdom such as Pakistan’s plans for the joint China-Pakistan JF-17 Thunder jets that Riyadh has allegedly expressed some interest in purchasing.

Sharif’s visit will likely follow up on issues raised during Saudi Foreign Minister Turki bin Faisal al Saud’s trip to Islamabad earlier this year. During that visit, the Saudi foreign minister met with Prime Minister Nawaz Sharif, President Mamnoon Hussain, and National Security Adviser Sartaj Aziz. The visit was the first high-level visit by a Saudi leader to Pakistan in six years and was described by the Pakistan government as “historic.” The Saud minister conveyed a message from King Abdullah about “ “friendship, cooperation and a commitment to stand by each other under all circumstances.”

Relations between Saudi Arabia and Pakistan have always been close–Saudi Arabia sees Pakistan as an important partner in South Asia and has purchased Pakistani small arms in the past. Relations cooled slightly following General Pervez Musharraf’s departure, with the Pakistan People’s Party’s government less receptive to the Saudis than prior Pakistani governments. Nawaz Sharif’s government has made attempts in its first year in power to return the bilateral relationship to its normal state, and Raheel Sharif’s visit will continue the momentum.

For Saudi Arabia, Pakistan is an important partner in its bid to contain Iran and Sharif’s visit so soon after Turki bin Faisal’s trip to Islamabad will send an alarming signal to Tehran. Close defense and security ties with Pakistan will help Saudi Arabia maintain its regional dominance with the assistance of an important non-Arab ally.

Sharif’s visit to Riyadh is unlikely to result in any major deals, but all signs point to closer ties between Pakistan and Saudi Arabia. Expect defense hardware deals, military exchanges, and training cooperation in the future.

The debate on the signing of the Bilateral Security Agreement (BSA) between Afghanistan and the US has been reignited after the State of the Union address by the US President on in January 2014. While the US is insisting on signing it at the earliest, Afghan President Karzai is in no hurry, saying that it should be considered only after the Afghan presidential elections in April. The US Defence Secretary Chuck Hagel asserted on that the US and its allies cannot continue to put off decisions about a post-2014 mission in Afghanistan indefinitely, and urged President Karzai to sign the pact.

While the debate continues, it would be interesting to examine whether the BSA can actually deliver peace and ensure lasting security, as being projected by the US. Will the signing of BSA severely alter the security situation in Afghanistan post 2014?

The BSA has taken into consideration some of the key concerns of the Afghan government. It states that the US does not seek permanent military facilities in Afghanistan or a presence that is a threat to Afghanistan’s neighbours, and has pledged not to use Afghan territory or facilities as a launching point for attacks against other countries. It also reaffirms American commitment to the sovereignty, independence, territorial integrity and national unity of Afghanistan, as well as respect for Afghan laws, customs and traditions.

The BSA also states that the US military operations to defeat al Qaeda and its affiliates would continue in the common fight against terrorism. There would, however, be no unilateral US counter-terrorism operations, but would complement and support ANDSF’s operations, with ANDSF in lead and with full regard for the safety and security of the Afghan people, including in their homes. It clearly highlights the commitment to financial pledges set at the Chicago Summit in 2012 to support the ANDSF.

What does BSA Promise?

The BSA promises the presence of around 10,000 troops, training and support and financial assistance to ANDSF. The troops are to be located in five to six bases which the US would retain in Afghanistan. The troops would be employed in training the ANDSF and provide logistics, air, communications and intelligence support. The troops could also be employed in counter-terrorist operations within the guidelines given in the BSA. The overarching promise of the BSA, as projected by the US, is the security guarantees it would be able to give to Afghanistan if it retains its troops there. It would however be interesting to see how feasible this would be.

At the peak of the US-led operations in Afghanistan in 2010-12 and to some extent even in 2013 (when responsibility was been transitioned to ANDSF), there were around 1,48,000 international troops. These troops had full authority over military operations in Afghanistan. The ANDSF was meanwhile being raised from a mere 70,000 to around 3,52,000 by the end of 2012. This included about 1,49,000 Afghan National Army (ANA) personnel and the remainder as police forces. The US-led forces conducted sustained ‘summer military campaigns’ over these three years to establish security as well as counter the Taliban’s ‘spring offensive’ every year.

Michael D. Swaine February 3, 2014 China Leadership Monitor Summary China’s failure to reassure other nations and clearly define the enforcement and impacts of its ADIZ has undermined any purported stabilizing intentions and damaged its larger strategic interests. China’s establishment of the East China Sea Air Defense Identification Zone has incited strong criticisms and increased regional tensions. Both authoritative and non-authoritative sources argue consistently and often emphatically that the zone is intended to improve safety and stability, and is not directed at any particular country or target. Yet, the vague language used to describe the zone as well as the extensive and often hostile rhetoric toward Japan suggests that such assertions are incorrect and disingenuous at best. While China has every right to set up an ADIZ, its failure to reassure other nations as well as clearly define the enforcement and intended impacts of the zone has undermined any purported stabilizing intentions and damaged China’s larger strategic interests. On November 23, 2013, the Chinese government for the first time publicly announced the establishment of an Air Defense Identification Zone (ADIZ), a portion of airspace contiguous to (or sometimes partly including) a country’s territorial airspace within which the identification, location and control of foreign aircraft occurs. Such zones presumably serve national security interests, primarily by providing adequate early warning of aircraft entering or flying near a country’s territorial airspace.1 The United States established the first ADIZ in the 1950s, to reduce the risk of a surprise attack from the Soviet Union. The United States currently has five zones (East Coast, West Coast, Alaska, Hawaii, and Guam) and operates two more with Canada.2 During the Cold War, Washington also defined the ADIZs claimed by Japan, South Korea and Taiwan. China’s new ADIZ covers a significant part of the East China Sea (ECS) contiguous to the Chinese coastline and overlaps in some areas with the ADIZs of Japan, South Korea, and Taiwan.3 It also includes the airspace above several islands, rocks and reefs that are currently under dispute with Japan and South Korea, including the Senkaku (in Japanese) or Diaoyu (in Chinese) Islands (hereafter referred to as the S/D islands) and the Socotra Rock (known as Suyan Jiao in Chinese and Ieodo in Korean)4, respectively (see Figure 1 in Appendix).

As a general rule, extreme economic decline is almost always followed by extreme international conflict. Sometimes, these disasters can be attributed to the human survival imperative and the desire to accumulate resources during crisis. But most often, war amid fiscal distress is usually a means for the political and financial elite to distract the masses away from their empty wallets and empty stomachs.War galvanizes societies, usually under false pretenses. I’m not talking about superficial “police actions” or absurd crusades to “spread democracy” to Third World enclaves that don’t want it. No, I’m talking about realwar: war that threatens the fabric of a culture, war that tumbles violently across people’s doorsteps. The reality of near-total annihilation is what oligarchs use to avoid blame for economic distress while molding nations and populations.Because of the very predictable correlation between financial catastrophe and military conflagration, it makes quite a bit of sense for Americans today to be concerned. Never before in history has our country been so close to full-spectrum economic collapse, the kind that kills currencies and simultaneously plunges hundreds of millions of people into poverty. It is a collapse that has progressed thanks to the deliberate efforts of international financiers and central banks. It only follows that the mind-boggling scale of the situation would “require” a grand distraction to match.It is difficult to predict what form this distraction will take and where it will begin, primarily because the elites have so many options. The Mideast is certainly an ever-looming possibility. Iran is a viable catalyst. Syria is not entirely off the table. Saudi Arabia and Israel are now essentially working together, forming a strange alliance that could promise considerable turmoil — even without the aid of the United States. Plenty of Americans still fear the al-Qaida bogeyman, and a terrorist attack is not hard to fabricate. However, when I look at the shift of economic power and military deployment, the potential danger areas appear to be growing not only in the dry deserts of Syria and Iran, but also in the politically volatile waters of the East China Sea.

Current trends suggest China’s slow march towards becoming a consumption-led economy, balancing what some economists term irreconcilable but inevitable in China’s case: growth and reform. Chinese GDP grew by 7.7 per cent in 2013 – the slowest since 2000 but higher than the state’s own projection of 7.5. Its total trade in 2013 grew a by a healthy 7.6 per cent to USD 4.16 trillion - higher than the US for the first time.

More importantly, though, while exports grew by 7.9 per cent, imports also grew by a strong 7.3 per cent, nearing almost USD 2 trillion – three times than in 2006. Supporting the trend in favour of consumption, China's National Bureau of Statistics said recently that the tertiary sector accounted for 46.1 per cent of GDP in 2013 - higher than the secondary sector unlike earlier. Similarly, there remains a strong demand for cars and a stronger one for real estate despite sharp price rises. Car sales rose by 14 per cent to reach a record USD 21.98 million and new homes sold 27 per cent more, amounting to USD 1.1 trillion in 2013. The November 2013 data also suggested that consumption-led growth was rising faster than investment-led growth.

On the policy front, there are clear signs of a renewed focus on propping up consumption as underlined during the 18th Communist Party of China (CPC) Third Plenum in November 2013. The Plenum also emphasised what China’s critics have been saying for a long time - that the one-sided pursuit of GDP growth, excessive dependence on exports and government investment for growth, and the current system of urbanisation among others, was unsustainable.

The most recent aspect of China's new economic policies involves prioritising poverty relief over GDP figures. The Central Committee of the CPC and the State Council said in its guidelines issued in late January 2014 that over the rest of this decade, officials’ performance in 592 poor counties would be evaluated through the creation of means to generate livelihood, and focus on environmentally and economically sustainable growth. A nationwide information framework is also proposed to aid future poverty alleviation efforts.

Despite China being the world’s second largest economy, its average national income is low with wide disparities (high GINI) and structural problems like artificially kept lower minimum wages. It acts as a hindrance in poverty alleviation and enhancing prosperity. On a positive note, wages are moving north. So far this year, the minimum wages announced in Shenzhen – a commercial hub – rose by 13 per cent. Emerging economic centers like Yangzhou witnessed a higher minimum wage rise at 15.6 per cent. More provinces will follow the trend and in turn demand expensive goods, better healthcare and stricter water and air standards – all of which will push consumption. Nonetheless, each of them will depend on the overall growth momentum which is under pressure.

Defense Minister General Abdul-Fattah Sisi will almost certainly become Egypt’s next president, but at the cost of taking Egypt back to the first republic..

Defense Minister General Abdul-Fattah Sisi, who was elevated to the supreme military rank of Field Marshal on February 1, 2014, will almost certainly become Egypt’s next president in the election scheduled to take place within the coming two months. His swift rise from obscurity as head of military intelligence a mere eighteen months ago and his charismatic, direct appeals to the Egyptian public since overthrowing President Mohammad Morsi on July 3, 2013, have prompted many to liken him to Egypt’s first president, Gamal Abdul-Nasser. Nasser, then a lieutenant-colonel, played a central role in the overthrow of the Egyptian monarchy and establishment of Egypt’s first republic in 1952, before becoming president by referendum in 1956.

Sisi’s confirmation as a national icon in the Nasser mold seems assured. And with the official nomination of the army behind him and several potential candidates already announcing they will not run against him, Sisi will similarly become president by what amounts to acclamation, rather than a genuinely contested election. While Prime Minister Hazem Beblawi recently likened Sisi to a modern-day De Gaulle or Eisenhower – generals who went on to become memorable presidents of France and the United States - former foreign minister and one-time presidential candidate Amr Mousa proclaimed that Sisi’s presidency would “pave the road for a civil state based on rights and freedoms.”

Mousa, who spoke without any apparent irony, also alluded to the historical parallel with the Nasser era by adding that “the third republic in Egypt will start” under Sisi. But Egypt never even made it to the second republic. The post- Mubarak transition was aborted by the weakness and divisions of the parties that contested the political field after February 2011, the inept management of the next fifteen months of the transition by the Supreme Council of the Armed Forces, the inability of the Muslim Brotherhood leadership and Morsi in the following year to grasp that nascent democracy required building genuine consensus, and the final military intervention of July 2013.

South Korea should not make Japan’s mistake and delay on much-needed reforms.

By Danny Leipziger

February 06, 2014

SEOUL – Given the daunting challenges facing Japan, one can only admire Prime Minister Shinzo Abe’s determination to end the country’s two-decade-long period of economic stagnation. His strategy – the “three arrows” of massive monetary expansion, increased government spending, and structural reform – is theoretically sound. But only one and a half arrows have been launched so far.

The stimulus package is being offset by consumption tax hikes aimed at reducing Japan’s massive debt burden – a process that will lead many Japanese consumers to adjust their spending downward. The promised structural reforms of the energy sector, labor market, and competition policy have yet to be introduced, and appear unlikely to take effect anytime soon. Even more worrisome are larger immutable realities – like a rapidly aging and shrinking population – that will limit Japan’s economic growth in the coming decades.

But Japan’s problems are not unique. Indeed, its neighbor and historical rival, South Korea, is headed down a similar path. The difference is that South Korea may still have time to ameliorate these trends, and avoid a Japanese-style quagmire of permanent low growth and long-term decline.

South Korea – the seventh-largest trading country in the world, and one of the most prominent economic success stories of the last 50 years – is at risk of such a bleak future as a result, first and foremost, of demographics. South Korea’s working-age population is falling by 1.2% annually – the fastest decline among OECD countries.

While there are many reasons for South Korea’s low fertility rate, two economic factors stand out. First, household debt levels are enormous, capturing a quarter of income, with mortgage payments taking the lion’s share. The ratio of housing prices to incomes is more than double that of the United States.

A concomitant feature of South Korea’s labor market is that women’s labor-force participation rate – a paltry 33% for women aged 30-39 – is among the lowest in the OECD. This partly reflects the difficulty of balancing child rearing with work in South Korea, compared to, say, Europe or the US.